In Cerezo v. Tuazon, the Supreme Court clarified the scope of an employer’s liability for the negligent acts of their employees under Article 2180 of the Civil Code. The Court held that an employer is primarily and directly liable for damages caused by their employee’s negligence, affirming that the injured party can claim directly from the employer without needing to include the employee in the suit. This decision underscores the principle that employers have a responsibility to exercise due diligence in both the selection and supervision of their employees to prevent harm to others. The ruling impacts businesses and individuals employing others, emphasizing the need for stringent hiring and oversight practices.

When an Accident Reveals Primary Liability

This case arose from a vehicular collision in Mabalacat, Pampanga, involving a bus owned by Hermana Cerezo and a tricycle driven by David Tuazon. Tuazon sustained serious injuries as a result of the incident and subsequently filed a complaint for damages against Cerezo, her husband, and the bus driver, Danilo Foronda. The central legal question revolved around whether Cerezo, as the employer, could be held directly liable for the damages caused by her employee’s negligence, even in the absence of a criminal conviction against the employee.

The factual backdrop of the case is crucial. On June 26, 1993, a Country Bus Lines passenger bus collided with a tricycle, resulting in severe injuries to Tuazon. Tuazon filed a complaint for damages, alleging that Foronda, the bus driver, operated the vehicle negligently, leading to the collision. The summons was initially returned unserved as the Cerezo spouses no longer held office at the stated Makati address. Alias summons was eventually served at their address in Tarlac. Despite participating in initial proceedings, the Cerezo spouses were later declared in default for failing to file an answer. The trial court found Mrs. Cerezo solely liable for the damages sustained by Tuazon, attributing it to the negligence of her employee, Foronda, under Article 2180 of the Civil Code. Mrs. Cerezo’s camp tried many times to appeal which failed because of technicalities and erroneous attempts to use remedies which were already prescribed.

The Supreme Court addressed the procedural remedies available to a party declared in default, referencing Lina v. Court of Appeals. This case states that a defaulted party may move to set aside the order of default, file a motion for new trial, file a petition for relief, or appeal the judgment. Mrs. Cerezo, having failed to avail of the proper remedies within the prescribed periods, attempted to file a petition for annulment of judgment, which the Court deemed inappropriate. The Court emphasized that annulment is available only when ordinary remedies are no longer accessible through no fault of the party, and in this case, Mrs. Cerezo had ample opportunity to appeal or seek a new trial.

The Court then delved into the core issue of employer liability under Article 2180 of the Civil Code. This provision states that employers are liable for damages caused by their employees acting within the scope of their assigned tasks. The Court clarified that the basis of Tuazon’s action was a quasi-delict under the Civil Code, not a delict under the Revised Penal Code, distinguishing between civil liability arising from a delict and that arising from a quasi-delict. The Court emphasized that an action based on a quasi-delict may proceed independently of a criminal action.

Employers shall be liable for the damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry.

The Court underscored that Foronda was not an indispensable party to the case because Mrs. Cerezo’s liability as an employer in an action for a quasi-delict is not only solidary but also primary and direct. An indispensable party is one whose interest is affected by the court’s action, without whom no final resolution is possible. The responsibility of two or more persons liable for a quasi-delict is solidary, meaning each debtor is liable for the entire obligation. As such, Tuazon could claim damages from Mrs. Cerezo alone, making jurisdiction over Foronda unnecessary.

Furthermore, the Court highlighted that an employer’s liability based on a quasi-delict is primary and direct, whereas liability based on a delict is merely subsidiary. The aggrieved party may sue the employer directly because the law presumes the employer has committed an act of negligence in not preventing or avoiding the damage. While the employer is civilly liable in a subsidiary capacity for the employee’s criminal negligence, they are also civilly liable directly and separately for their own civil negligence in failing to exercise due diligence in selecting and supervising the employee.

The action can be brought directly against the person responsible (for another), without including the author of the act. The action against the principal is accessory in the sense that it implies the existence of a prejudicial act committed by the employee, but it is not subsidiary in the sense that it can not be instituted till after the judgment against the author of the act or at least, that it is subsidiary to the principal action; the action for responsibility (of the employer) is in itself a principal action.

The Supreme Court held that the trial court had jurisdiction and was competent to decide the case in favor of Tuazon and against Mrs. Cerezo, even in Foronda’s absence. It was not necessary for Tuazon to reserve the filing of a separate civil action because he opted to file a civil action for damages against Mrs. Cerezo, who is primarily and directly liable for her own civil negligence. The Court cited Barredo v. Garcia to support the view that requiring the plaintiff to exhaust the employee’s property first would be a cumbersome and unnecessary process.

In conclusion, the Court affirmed the Court of Appeals’ decision, modifying the amount due to include legal interest. The Supreme Court underscored the importance of employers exercising due diligence in the selection and supervision of their employees to prevent harm and ensure accountability for negligent acts. This case reinforces the principle that employers cannot evade liability by claiming the employee is solely responsible, emphasizing the primary and direct nature of their responsibility in quasi-delict cases.

FAQs

What was the key issue in this case?	The key issue was whether an employer could be held directly liable for damages caused by the negligence of their employee under Article 2180 of the Civil Code.
Who was David Tuazon suing and why?	David Tuazon sued Hermana Cerezo, the owner of the bus line, for damages he sustained due to the negligence of her bus driver, which caused him serious injuries in a vehicular accident.
What is a quasi-delict?	A quasi-delict is an act or omission that causes damage to another, where there is fault or negligence but no pre-existing contractual relation between the parties. It gives rise to an obligation to pay for the damage done.
Why was the bus driver not considered an indispensable party?	The bus driver was not indispensable because the employer’s liability for a quasi-delict is primary and direct, meaning the injured party can claim directly from the employer without necessarily including the employee.
What does ‘primary and direct liability’ mean in this context?	‘Primary and direct liability’ means that the employer is immediately responsible for their own negligence in the selection and supervision of employees, and the injured party can sue the employer directly.
Can an employer be held liable even if the employee is not convicted in a criminal case?	Yes, because the civil action based on quasi-delict is independent of any criminal proceedings. The employer’s liability arises from their own negligence, not necessarily from the employee’s criminal act.
What remedies are available to a party declared in default?	A party declared in default can move to set aside the order of default, file a motion for new trial, file a petition for relief from judgment, or appeal the judgment.
What is a petition for annulment of judgment, and when is it appropriate?	A petition for annulment of judgment is a remedy available only when the ordinary remedies are no longer accessible through no fault of the party, and it is based on grounds of extrinsic fraud or lack of jurisdiction.
What was the final ruling of the Supreme Court?	The Supreme Court denied Mrs. Cerezo’s petition, affirming the Court of Appeals’ decision and holding her liable for damages due to her employee’s negligence, and modified the amount due to include legal interest.

This case serves as a reminder to employers about their responsibility to ensure the safety and well-being of the public by properly overseeing their employees. The decision reinforces the principle that employers are accountable for their own negligence in the selection and supervision of their staff. In light of this, employers should review their hiring and training processes to mitigate potential liabilities.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Herman R. Cerezo v. David Tuazon, G.R. No. 141538, March 23, 2004